The avenue for merger opened after Nepal Rastra Bank (NRB) approved their proposal to undergo merger this week.
NB Bank and NSLMB had lodged application seeking NRB´s nod for unification on November 1, 201“We received the central bank´s approval this week,” confirmed Chief Executive of NB Bank Govinda Babu Tiwari. NB Bank is a commercial bank, while NSLMB is a finance company.[break]
Now the merger committee, comprising of officials from both the institutions, will execute the merger process that includes resolving the issues of accounts and staffing, before issuing a public notice about the merger, said a source.
The committee will consolidate the books of accounts, test the account and formalize the assets and liabilities takeover by the NB Bank.
It will inform the details of procedures completed to the central bank, following which NRB will issue public notice within 35 days, terminating the operating license of NSLMB and declaring NB Bank´s take over of its assets and liability.
Going by the agreement reached so far, the merging committee has decided to retain Khim Bahadur DC, deputy general manager of NSLMB, as a Senior Manager of NB Bank after the merger.
Likewise, NSLMB´s managers Min Raj Jung Shah and Kabindra Dahal will be appointed as assistant managers of NB Bank after the merger. Assistant Manager of NSLMB Kaushalya Shrestha will be taken in as the Senior Executive Officer of NB Bank
NRB had agreed in principle to the initial proposal of their merger about a month-and-a-half ago and instructed them to confirm the date of accounts consolidation within three months.
It had also questioned NB Bank about its plan to repay the depositors of NSLMB. NSLMB, a joint venture between NB group and Merchant Bank of Sri Lanka, was facing difficulty to pay back the deposits even after the maturity of accounts.
Previously, NSLMB had sought the central bank´s approval to undergo merger with another venture of the NB group, Nepal Credit and Commerce Bank. But NCC had declined the request two years ago.
Likewise, the central bank had declared NB Bank as troubled bank and taken over its management in 2007 after irregularities by the bank´s promoters badly disoriented its financial health.
It was only in mid-January, 2010 that the central bank had released its control and handed over the management to the newly elected Board of Directors.
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